Maybe Germany Actually Wants Cyprus to Leave the Euro

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I was noodling over Cyprus last night and a thought occurred to me. Maybe, from the perspective of Germany and the other core EU countries, a default and exit from the euro would be a good thing.

I’m not really serious about this, but here’s the pitch. Cyprus is tiny enough that default and exit wouldn’t have any actual effect on the broader EU economy. It would be a rounding error. And because (a) Cyprus is tiny, (b) Cyprus adopted the euro only five years ago, and (c) Cyprus has a unique status as an offshore banking haven for Russian billionaires, it would be fairly easy to convince the financial community that their default is a special case that doesn’t have any broader implications for the eurozone.

So the eurozone would be OK. But if Cyprus chooses this route, the Cypriot economy is going to be in shambles. Sure, in the long run, they might do OK by readopting the pound and devaluing it, but in the short term it would be ruinous. Residents wouldn’t just lose 6.5 percent of their savings, they’d lose something like a third of their purchasing power thanks to recession and devaluation. It would be a long, grinding disaster.

And perhaps that would be a very pointed object lesson for voters in Greece and Spain and Portugal that default and exit is even worse than the austerity the EU is insisting on. The implicit message would be: You might not like it, but you better go along if you know what’s good for you. Just look at what happened to Cyprus.

So….from the German perspective, Cyprus could provide a very cheap demonstration of the dangers of calling their bluff. Who knows? Maybe they think that would be worth it. This should give Cypriots pause for thought.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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